Free Tool — Payment Terms Calculator
Payment Terms Calculator
Turn terms like "2/10 net 30" into real dates and rupees — due date, early-payment savings, and what skipping the discount actually costs.
Payment due date
7 Dec 2026
Pay early by
17 Nov 2026
Early payment saves
₹2,000.00
Cost of skipping discount
37.2% / yr
A “2/10 net 30” term means a 2% discount if paid within 10 days, otherwise the full amount is due in 30 days. The annualized cost shows what skipping that discount effectively costs as an interest rate — often far more than a working-capital loan.
Decode invoice terms in seconds
Terms like "net 30" or "2/10 net 45" pack a due date, a discount and an implicit interest rate into a few characters. This calculator unpacks them: the exact calendar due date from the invoice date, the discount amount if you pay within the window, and the annualized cost of choosing not to.
That last number surprises people. Skipping a 2% discount to hold cash for 20 extra days is equivalent to borrowing at over 36% per year — far more expensive than most working-capital finance. Knowing that lets you decide with numbers, whether you're the buyer or the seller setting terms.
Payment terms formulas
Payment due date = Invoice date + Net days, counted in calendar days. Pay-early date = Invoice date + Discount window days. Early payment saving = Invoice amount × Discount % ÷ 100. Cost of skipping the discount (% per year) = Discount % ÷ (100 − Discount %) × 365 ÷ (Net days − Discount window days) × 100. When the discount window is as long as the net term or longer, the cost shows 0%.
How to use the payment terms calculator
- 1Enter the invoice amount.
- 2Pick the invoice date. It starts on today's date, so change it for an older bill.
- 3Type the payment terms in net days, or tap a preset: Net 7, 15, 30, 45, 60 or 90.
- 4Enter the early payment discount % and the discount window in days. Set the discount to 0 if the invoice has plain net terms.
- 5Read the payment due date. With a discount above 0 you also see the pay-early-by date, the rupee saving from paying early and the yearly cost of skipping the discount.
Worked example: 1/15 net 45 on a ₹2,50,000 invoice
A restaurant gets a ₹2,50,000 bill from its dry-goods supplier dated 15 October 2026, on terms of 1/15 net 45: 1% off if paid within 15 days, otherwise the full amount in 45 days. In the payment terms calculator, enter ₹2,50,000, the invoice date, 45 net days, a 1% discount and a 15-day window. It shows a payment due date of 29 Nov 2026, a pay-early date of 30 Oct 2026 and a saving of ₹2,500. Paying early therefore means sending ₹2,47,500 instead of ₹2,50,000.
Skipping the discount buys 30 extra days of credit (45 − 15) for ₹2,500. The calculator annualizes that as 1 ÷ 99 × 365 ÷ 30 × 100 = 12.3% a year. If your overdraft or cash credit limit costs less than that and has room, paying early with borrowed money comes out cheaper. If it costs more, holding the cash until day 45 is the better use of your working capital. For plain terms without a discount, see how net 30 works.
Payment terms tips for buyers and sellers
- Write terms in words on every invoice, such as "1% off if paid within 15 days, otherwise due in 45 days", so the customer's accounts team cannot misread them.
- Agree terms in the quotation or purchase order before the goods ship, so the invoice only repeats what both sides already accepted.
- If there is no early payment discount, pay on the due date rather than before it. Those days of credit cost you nothing.
- Buying from a micro or small manufacturer or service provider registered under Udyam? The MSMED Act caps agreed credit at 45 days (15 days if nothing was agreed), and paying later can delay your income tax deduction for that expense until the year you actually pay.
- Pay suppliers within 180 days of the invoice date. Under GST rules, input tax credit on bills still unpaid after 180 days has to be reversed, and can be claimed again once you pay.
- Track open invoices by age so that bills past 30, 60 and 90 days get followed up before they turn into bad debts.
Related tools for receivables and payables
Payment terms FAQs
Pay within 10 days and take a 2% discount off the invoice; otherwise the full amount is due in 30 days from the invoice date.
Cost ≈ (discount % ÷ (100 − discount %)) × (365 ÷ extra days of credit) × 100. For 2/10 net 30, that's (2 ÷ 98) × (365 ÷ 20) ≈ 37% per year — what the extra 20 days of credit effectively costs.
Usually the invoice date, unless the contract says otherwise (some use end-of-month terms, written "net 30 EOM"). This calculator counts calendar days from the invoice date you enter.
If cash flow is tight or debtors pay slowly, a small discount can pull cash in dramatically faster and cut follow-up effort. Price it consciously — the same annualized-cost math applies to you as the seller.
No. The calculator counts plain calendar days from the invoice date, so a net 30 due date can land on a Sunday or a public holiday. If your contract does not say how such dates are handled, pay on the previous working day so the payment is not late, or agree the rule with your supplier in writing.
The calculator applies the discount percentage to whatever invoice amount you enter. Enter the total bill if the supplier allows the discount on the full amount, or the taxable value if the terms say so. Whether the discount also reduces the GST depends on how it was agreed and documented, usually through a credit note, so confirm the treatment with your accountant.
Due on receipt means the customer should pay as soon as the invoice arrives. Net 30 gives them 30 calendar days from the invoice date. To see a due-on-receipt invoice in this calculator, set the payment terms to 0 days and the due date will match the invoice date. Shorter terms bring cash in faster, but larger buyers often push for longer ones.
No. It covers the due date, the early payment discount and the cost of skipping it. Late payment interest depends on what your contract or invoice says. If your supplier is a micro or small manufacturer or service provider registered under Udyam, the MSMED Act sets interest on delayed payments at three times the bank rate notified by the RBI, compounded monthly, whatever the contract says.
More calculators
GST Calculator
Add or remove GST from any amount in a tap, for any tax slab.
Try itBusiness Loan EMI Calculator
Estimate your monthly EMI, total interest and total payment on a business loan.
Try itTake-Home Salary Calculator
See your monthly in-hand salary after PF, professional tax and other deductions from CTC.
Try itNumbers that track themselves
Setu's POS and business tools record sales, costs and tax automatically, so reports build themselves while you work.
Explore Setu Dine →